Exportation in Nigeria and why you should key in. Or loose out

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Exportation in Nigeria
Starting export business Nigeria is not as daunting as often painted. Most people out there create scenes of unattainable requirements for export business. Consequently, they have discouraged those who would have contributed much to the country’s foreign earnings. The federal government on the other hand is encouraging more exporters. However, the truth is the more we export goods the better our economy.

Market opportunities?
According to a recent record about 45 million African Americans live in the United States of America. This then present market opportunities for African products such as African foodstuff (fufu, cassava, crayfish, yam, garri, palm oil, melon seeds, bush mango seeds, okra, cocoyam powder, pepper, spices), African hair accessories, clothing, craft, arts etc.
.
If you add up the size of Africans in Canada, Europe to the number of those in the USA, then you see a potential export business waiting to be tapped. So, starting export in Nigeria is an untapped gold mine with future promises.
Caribbean regions also present a veritable market for African products too with a reasonable population size of Africans over there. Therefore, increase chances for export in Nigeria.
This write up will introduce you to everything you need to know about export in Nigeria, classifications of exporters, benefits of export in Nigeria, export business options and possible challenges during export in Nigeria

 

Who is an Exporter?
Export in Nigeria involves taken out for sale to other countries anything that is manufactured or sourced in Nigeria. An exporter is a person who makes profits by selling Nigerian made goods or services in a foreign market.
The federal government through several incentive programmes today encourages export of Nigerian made goods and services.
Export business is the future business as well said by Nigeria Export Promotion Council.

As a potential income generating business, corporate entities as well as, individuals have abundant opportunities to participate, sanitize and ensure that the country’s image is not compromised through shady deals in export

Classifications of Exporters
Exporters can be classified into the following categories:
Export Manufactures: These are manufacturing companies who also export their products to foreign markets

Export Trader: This is an exporter who buys goods and trade in a foreign market. This is the category that most of us fall into. It involves selling Nigerian goods that present foreign markets.

Service Exporters: This is a business entity or an individual that provides services for agencies doing export in Nigeria. These may include:

• Ocean shipping line
• Banks
• Consultancy
• Airlines
• Road carriers
• Freight forwarding
• Couriers
• Custom brokers
• Logistics handling
• Insurance companies
• Trade show organizers
• Training

Different Kinds of Export in Nigeria

Full-Time Exporter: This involves those that are 24 hours available such as those that just resigned or lost their jobs, retiree and business organizations that like to be fully involved in their export operations. They only engage freight forwarders minimally for port loading operations.

Becoming a full-time exporter offers between 30% to 45% of return on investment depending on the negotiating power and sourcing abilities of the exporter.
The exporter will be involved in the following duties:
• Export Planning
• Export Financing
• Export Contract Sourcing
• Export Product Sourcing
• Pre-Export Documentation
• Haulage To The Warehouse
• Warehousing and Inspection
• Freight Forwarding
• Haulage To The Port of Loading
• Post-Export-Documentations

Part-Time Exporter: These are for individuals that would like to start a business while still in a paid employment and also have some time to spare. It’s also a viable option for existing businesses that want to divest. It could yield 25% to 35% return on investment.
They depend on freight forwarders and consulting firms to carry out some of their export duties and operations. The export is involved in:
• Export Planning
• Export Financing
• Export Product Sourcing
• Pre-Export Documentation
• Haulage to The Warehouse
• Haulage to the Port of Loading
• Post-Export-Documentations.

Consort Exporter: This is an individual who is into export in Nigeria while still in paid employment but does not have enough time to spare.
The return on investment for this one could range from 10% to 25%. He or she depends on local sourcing and buying agents, consulting firms and freight forwarders to carry out most of the operations.
The exporter is only involved in:
• Export Planning
• Export Financing
• Pre-Export Documentation
• Post-Export Documentations.

Export Broker: Becoming an export broker is one of the easiest and most rewarding ways any prospecting exporter can raise money to go into full-time export business.
They provide exporters or importers with assistance in transporting their product from point A to point B. This includes assisting exporters with advice and formal paperwork that must be completed to ensure smooth export of cargo. Over the years, their role has been extended to the entire supply chain. Not only do they act as an exporter’s “shipping department”, their roles also encompass shipping, product sourcing, inventory management, customs clearance, warehousing and distribution.
Selling to foreign markets can change your business. Like any fundamental change to the way you trade, there are risks as well as benefits you should consider. You should weigh them up before starting to move into overseas markets.

Advantages of Export in Nigeria
The reason for individuals or companies to consider exporting is quite compelling; the following are few of the major advantages of exporting:
• Maximize profits by exploiting opportunities in foreign markets that don’t exist in the domestic market.
• Increased Sales and Profits.
• Enhance Domestic Competitiveness
• Gain Global Market Shares
• Diversification
• Lower Per Unit Costs
• Compensate for Seasonal Demands
• Create Potential for Personal or Company Expansion.
• Sell Excess Production Capacity
• Gain New Knowledge and Experience
• Expand Life Cycle of Product

Export Challenges
The following are some of the challenges you may come across when venturing into the international marketplace.
• Getting Genuine Buyers
• Extra Costs.
• Product Modification
• Financial Risk
• Export Licenses and Documentation
• Market Information

Conclusion
Starting an export in Nigeria requires:
• Careful Planning
• Some Capital
• Market Know-How
• Access to Quality Product
• Competitive Pricing Strategy
• Management Commitment

 

Start export business in Nigeria; food processing, agricultural and minerals exports.

Packed for local and foreign market.

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Snail export business is a gold mine, learn the breeding, shipping and exporting

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Snail is an export commodity, which has value next to gold in overseas countries.

 

It is a foreign exchange income earner of our days. Our climate is one of the best in snail breeding.  It is a great money-spinning business that can provide a substantial source of protein to complement Nigerian carbohydrate meals.

 

The best period to commence snail farming is the rainy season, you can start with about 50 – 60 snails to have a good knowledge of how snail breeding works. Make sure you go for fully matured and big nails; the African giant snails are recommended.

 

During exportation do not provide food, as it will spoil and may make the snails sick or die. Purge the snails’ digestive tracts to ensure that they are clear of grit or previously-eaten food. Three or 4 days before transporting,  put the snails in a separate container without dirt or other kinds of food.

 

If your start up capital is N50, 000 you can generate the sum of one million naira in one year. There is a flourishing international trade of snails in Europe and North America. In France the annual requirement is about 5 million kg, over 60% of which is imported. The estimated annual consumption in Italy is 306 million snails.

 

 

 

When you see snails stick to a tree stump, hide under stones or leaves, what impression do you have of them? When you see them displayed in the market places, do you view them as one of those edible animals meant for the soup pot?

 

Many people see snails here and there. Some people take it as meat. But quite a number don’t know how to go about rearing them. This is made worse because snails, which belong to the family of animal called MOLLUSCA, is an hermaphrodite. It has both the female and male sexual organs; so one cannot really distinguish between the male and female specie of it.

 

Many who rear the animal are also unwilling to let others know about the farming methodology. The techniques are often shrouded in secrecy. But the plain truth is that snail farming is as easy as ABC. The only thing the snails may constantly demand from you is your attention and care.

 

They hardly fall sick. You don’t have to buy their food and you may not have to spend much to create an abode for them. The beauty of it all is that the snails reproduce rapidly. They are capable of producing hundreds of eggs, which hatch into snails. It is now possible to produce 1,000,000 snails worth more than N5 million twice a year. This is made possible because of the availability of very highly prolific ACHATINA ACHATINA species of snails, which lay 200-400 in one batch 2-3 times a year.

 

Nigeria’s economic recovery programmes have necessitated a radical shift from total dependence on government for job to self-employment. One such attractive area for self-employment is snail rearing. It is a great money-spinning business that can provide a substantial source of protein to complement Nigerian carbohydrate meals.

 

Sadly Nigerians inclination to go into business in the fields where thousands have already made their fortune has led to the ulter neglect of such lucrative area of snail farming or export at international market.

 

Huge income earning opportunity: One of the Personnel Entrepreneurial Characteristic (PEC) that makes a big different between a successful entrepreneur and an unsuccessful one is opportunity seeking. That is seeking, recognizing and acting on new business opportunities.

 

Shipping:

 

Select only active snails for canning, processing or shipping. An inactive snail may be sick or dying. It is best to ship live snails (laws permitting) while dormant, between late Fall and early March, although it is then difficult to be sure they are “active.” Inspect each snail to be sure it looks healthy. Put them in a container packed in ice to keep the temperature near (but not below) freezing to keep the snails dormant.

 

When the weather warms up and the snails are active, they cannot be packed so closely in cartons. As live animals, you must handle them humanely. Some sources say not to ship live snails (H. pomatia) after June begins, as they no longer have good flavor. H. aspersa has a fragile shell until it matures and forms a lip, so immature snails are not commercially desirable.

 

 

Snails tend not to eat during shipping. Do not provide food, as it will spoil and may make the snails sick or die. Purge the snails’ digestive tracts to ensure that they are clear of grit or previously-eaten food. Three or 4 days before transporting, put the snails in a separate container without dirt or other kinds of food. Feed the snails cornmeal or bran for several days. As it passes through the digestive tract, it will clean out previously-eaten food. Stop feeding, but continue to supply water. Clean the pens and snails several times a day to keep out mucus and fecal matter.

 

Shipping cartons must have air holes, preferably screened to prevent escape or injury to the snails. Be careful not to injure snails with wires or staples when closing the carton. Also remember, snails can push upward against a barrier with a force equal to several times their own weight. Enough snails may cause the carton lids to pop off and may even loosen nails.

 

Turning Snails into Escargot

Snails are mature when a lip forms at the opening of their shell. Before they mature, their shells are more easily broken, making them undesirable. For H. aspersa, commercial weight is 8 grams or larger.

 

Snails are washed, steamed, shelled, then washed in a vinegar- (or lemon juice) and water-solution before they are canned. Producing a quality canned product is somewhat tricky, and you must take care to prevent food poisoning.

 

To prepare live snails for cooking, remove the membrane, if any, over the shell opening. Soak the snails in enough water to cover them. (Add 1/2-cup salt or 1/4-cup vinegar for every 50 snails.) Mucus will turn the water white. Change the water several times during the 3- to 4-hour soaking. Rinse several times or under running water until no mucus remains. Put snails in cold water and bring to a boil. Boil about eight minutes, then drain and plunge the snails into cold water. Drain.

 

With a needle or small fork, pick the snails out of their shells. Remove the intestine and cut off all black parts. (Some cooks also cut off the head, tail, and all “cartilage or gristle.”) Prepare according to your recipe. An alternate method is: Wash the snails well in clear water. Drop into boiling salt water (to which you may add lemon juice and/or herbs), and cook–about 10-15 minutes–until you can easily remove the snails from their shells. Drain and rinse.

 

Prepare the giant African snail by breaking away the shell, then cutting the foot away from the rest of the body. The traditional way to remove the slime is to rub wood ashes on the snail, then wash the snail (or part of the snail) under running water, then repeat until no slime remains.

 

You may substitute substances like flour (to which you may add salt and vinegar) for ashes. Cut up the foot into convenient-sized pieces. [You may dehydrate the leftover visceral mass, crush it up with the shell, and mix it in poultry feed to make up 10% of your snail feed.] Another source says put the live snails in boiling water for 30 minutes to kill them and to make removal from the shell easy. During boiling, the snails will release a large quantity of mucus. Data varies, but 28% to 46% of the live weight of Achatina is shell.

 

 

Restrictions and Regulations:

 

The same snails that some people raise or gather as food also are agricultural pests that cause considerable crop damage. Introduced slug and snail varieties tend to be worse pests than native species, probably due in part to the lack of natural controls. Snail pests attack crops ranging from leafy vegetables to fruits that grow near the ground, such as strawberries and tomatoes, to citrus fruits high up on trees.

 

Improper canning of low-acid meats, e.g., snails, involves a risk of botulism. When canning snails for home consumption, carefully follow canning instructions for low-acid meats to prevent food poisoning.

 

 

MERITS OF SNAIL FARMING

 

1 Snail farming is a virgin in the kingdom of livestock as a result the earlier investors without doubt have bright prospects in exploring this venture.

  1. Snail farming is a practicable and viable venture yet unexplored in Nigeria. If it has worked elsewhere, it will work in Nigeria.
  2. This technology has been approved to be most lucrative farming venture presently, as it requires far less capital investment, while much profit is being generated in a considerable short period. It has lower risk compared to other livestock farming.
  3. The demand for snail is higher than the supplies as such the market potential of snail is inexhaustible, locally and internationally.
  4. Virtually every part of snail is of vital use in Food, Pharmaceutical industry, manufacturing and fishing industries.
  5. Snail is an export commodity, which has value next to gold in overseas countries. It is a foreign exchange income earner of our days. Our climate is one of the best in snail breeding.
  6. Snail farming requires small capital and the running cost is very low, hence their feeds are very local.
  7. If your start up capital is N50,000 you can generate the sum of one million naira in one year. Some people in other livestock may earn another N50,000, if they met no risk in a year.
  8. Snail business indeed is a GEM in the livestock business. Therefore take advantage of the opportunity of being among the forerunners in this unbeatable venture.
  9. You can conveniently earn income a thousand fold higher than your present earning. You can keep your present job and do this on part time since it doesn’t require much time.
  10. This is a real export market that earns foreign revenue without you running from pillar to post.
  11. This is not fiction but factual. Not imaginary but a reality. You too will share your view with others.

13. No stress, no time consuming, no odour, no noise and no irritation

 

 

Get started today, learn more about snail export business and become an international trader.

 

 

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Foreign buyers in need of Ukazi leaf often prepared by the Igbo – African Salad

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Ukazi leaf, also known as Afang leaf (Gnetum africana) can be eaten raw as prepared by the Igbos in the popular African Salad “Ugba”. The people of the republic of Congo also consume the afang leaves which they call “Mfumbwa”.

 

Afang leaf is so named by the Efiks and Ibibios, Igbos call it “ukazi”, “Eru” by the Cameroonians and “koko” in Congo. The Afang leaf itself serves as a dietary fiber which helps in proper digestion and gives a bulk feeling, vital for a good weight control diet. It also contains Vitamin A, fat, oil, and iron.

 

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Fish export in Africa is very profitable, using smokehouse to preserve it

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Fish export is very profitable if well preserved and sold within its shelf life for consumption, however in the past years, many traders have found better methods to keep it preserved for longer period and still healthy to consume. Some of the ways of preservation are listed below.

 

A smokehouse is a building where fish or meat is cured with smoke. In traditional fishing villages, a smokehouse was often attached to the cottages the fishermen lived in. The smoked products might be stored in the building, sometimes for a year or more.

Traditional smokehouses served both as smokers and to store the smoked fish Food preservation occurred by salt curing and extended cold smoking for two weeks or longer.

 

Smokehouses were often secured to prevent animals and thieves from accessing the food. Traditional versus mechanical Today there are two main methods of smoking fish:

 

The traditional method and the mechanical method.

 

The traditional method involves the fish being suspended in smokehouses over slowly smouldering wood shavings. The fish are left overnight to be naturally infused with smoke.

 

Smoked fish for export on cokodeal
Smoked fish for export on cokodeal

 

In the mechanical method smoke is generated through the use of smoke condensates, which are created by the industrial process of turning smoke into a solid or liquid form. The flow of smoke in the mechanical kiln is computer controlled and the fish generally spend less time being smoked than in a traditional kiln.

 

 

Laminar air-flow technology allows mechanical kilns to achieve a higher production rate, while the use of micro-processors has allowed mechanical kiln smokers increased sensor coverage within the kiln.

 

 

However, traditional smokers argue that this removes the human element from production. They feel that a computer is no substitute for many years of hands on experience. Most traditional smokehouses have developed their method across generations.

 

 

Mechanical kiln smoked fish represents a quantitative approach where supermarkets represent the main market. Traditional fish smoking is a qualitative process. Traditional smoked fish is a high end product sought after by restaurants

 

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How to export agricultural product in Nigeria, terms and guidelines

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DISCOVER THE SECRETS OF EXPORTING WITH AN EMPTY BANK ACCOUNT, NO EXPERIENCE, NO OFFICE APARTMENT AND AT YOUR OWN CONVENIENCE.

Please NOTE; This document is not a blog post, to be read once, It is a document that you may need to visit for reference and re – read often times. THANK YOU

 

 

Do you like the idea of running your own business? How would you like a tax deductible trip to foreign places a couple of times a year? The advantages of an export business are great.

Do you know that you can start and operate your own highly lucrative export business with little or no capital at your spare time and right from home?

What a good way to build up a successful business from nothing and have fun doing it? The export business may be your answer. You don’t need previous experience in the field but you should have a “GOOD HEAD” for organizing.

Not only does it require little or no financial investment, it also offers the prestige of working with clients from all over the world. This has been made possible due to the advancements in information and communication technology(ICT). Especially, the emergence of the INTERNET

The internet has transformed the world into a “GLOBAL VILLAGE” such that a commercial ginger farmer in KADUNA, NIGERIA can access the contact details of an importer of ginger based in HAMBURG, GERMANY.

Apart from accessing the foreign importers contact details, the farmer could still go ahead to call the product buyer with the aid of his GSM phone. The buyer and seller upon introduction and establishment of contact, could also go ahead to sign a sales contract for the export of a certain quantity of the product at an agreed price, convenient and secured method of payment without both parties seeing each other.

 

THAT IS THE POWER OF THE INTERNET.

Fulfilling a successful export business requires constant attention even to the minutest details that concerns the transaction.

If you have an ability to sell and an air of transparency and diplomacy, the export business might be right for you.

ALL YOU NEED IS THE DESIRE AND DETERMINATION

TO MAKE IT WORK.

As you progress in the business, many factors become obvious and easy to handle. For example, you’ll need to find a person to handle shipments called a “freight forwarder”.

And you’ll need to create solid contacts and strong relationships with reliable local product suppliers and also export merchants. But after a short time, you can be well on your way to making a sizeable income with a very low overhead.

WHAT DO YOU NEED TO KICK START THIS VENTURE?

Mobile phone

Bank account (savings or current)

Email address

Internet/ cyber café

Understanding of an export business process

The determination and desire to make it work

 

 

FACTS ABOUT ONLINE BASED EXPORT BUSINESS

No need to have a registered public/ private limited liability company with (CAC)

No need to register with Nigeria Export Promotion Council (NEPC)

No capital investment required

You can operate as a part time business

A wonderful precedence before going into full time export business

HOW CAN YOU MAKE MILLIONS OF NAIRA IN ONLINE EXPORT- BIZ INVENTION?

It might interest you to know that the gap between you and the millions of naira waiting for you in this business is nothing but the “basic understanding of an export business process”. Understanding the fundamentals of an export business process especially as it concerns securing a

GENUINE EXPORT ORDER/ CONTRACT with a well secured method of payment, then you are on your way to making UNIMAGINABLE LOADS OF MONEY.

What you should do as an export entrepreneur is tosecure these contracts via the internet using the various trade portals listed in this manual and also aided with your GSM phone, you could start earning commissions which run into millions of Naira in few months depending on the size of the shipment. This manual contains all you may need to secure a “genuine export contract”. All you need to do is to read through, carefully understanding the elements of an export business process.

 

THIS IS WHERE YOU COME IN

An export broker is a match maker. Becoming an export broker is one of the easiest and most rewarding ways any prospecting exporter can raise money to go into full time export business. The advantages are enormous.

Starting from a little or no capital, an export broker could earn large “finders fee” with absolutely unlimited income.

There is hardly another business requiring a negligible startup cost that can put you into a six figure bracket so quickly than online-based export business. It gives one the power, prestige and high respectability in his community.

Manufacturers of domestic goods seek foreign distribution of Nigerian commodities in the international market. You need to find the foreigners who want to buy the raw materials / goods of Nigerian origin. Make a solid connection and establish a business relationship with their companies.

 

GETTING STARTED

It might be slow at first, and you will need to plan your moves, make contacts and SELL YOURSELF. But once you make a few sales and sign several contracts, you will know that your dedication was worthwhile.

 

MAKING CONTACTS WITH FOREIGN BUYERS

The most important step in setting up your online based export business is finding the contacts of buyers. One of the ways of making contacts with foreign buyers of Nigerian commodities is by going online to establish instant contacts.

You can achieve this by signing up for FREE with cokodeal.com! or With most of the international trade directories which are listed on the internet. Some of such directories are listed in subsequent pages of this manual.

Other sources of foreign buyers are the foreign

consulates (embassies)

Another way to establish contacts is through the chamber of commerce of every city you are aiming for.

are only a few of these businesses that’s

why there is plenty room for more.

Government agencies such as Nigerian Export Promotion Council (NEPC) are great places to find help. This agency promotes export business.

 

ANALYSIS FOR THE EXPORTATION OF THE FOLLOWING COMMODITIES”

CHARCOAL

SESAME SEED

GINGER

BITTER KOLA

CASHEWNUTS

KOLA NUTS

GROUNDNUT

 

FOR YOU TO SOURCE A GENUINE EXPORT CONTRACT, YOU MUST BE WELL ACQUAINTED WITH THE FUNDAMENTAL PROCEDURE AND RUDIMENTS OF AN EXPORT BUSINESS PROCESS. THIS IS THE ESSENCE OF THIS DOCUMENT

INTERNATIONAL COMMERCIAL TERMS (INCOTERMS) The INCOTERMS (International Commercial Terms) is a universally recognized set of definitions of international trade terms, such as FOB, CFR and CIF, developed by the

International Chamber of Commerce (ICC) in Paris, France. It defines the trade contract responsibilities and liabilities between buyer and seller. It is invaluable and a cost-saving tool. The exporter and the importer need not undergo a lengthy negotiation about the conditions of each transaction. Once they have agreed on a commercial term like FOB, they can sell and buy at FOB without discussing who will be responsible for the freight, cargo insurance, and other costs and risks.

TON (TONNE): This is the recognized international unit of measurement that is used in export. 1ton = 1000kg weight of any commodity. Hence if a foreign buyer orders for 10tons weight of goods, he is demanding for 10,000kg weight of the

product in question.

MT (METRIC TONNE): This incoterm could be used in place of the above as both mean the same thing in export.

EXW {+ the named place} Ex Works : Ex means from. Works means factory, mill or warehouse, which is the seller’s premise. EXW applies to goods available only at the seller’s premises. Buyer is responsible for loading the goods on truck or container at the seller’s premises, and for the subsequent costs and risks.

In practice, it is not uncommon that the seller loads the goods on truck or container at the seller’s premises without charging loading fee. In the quotation, indicate the named place (seller’s premises) after the acronym EXW, for example EXW Kobe and EXW San Antonio. The term EXW is commonly used between the manufacturer (seller) and export-trader (buyer), and the export-trader resells on other trade terms to the foreign buyers. Some manufacturers may use the term Ex Factory, which means the same as Ex Works.

FCA {+ the named point of departure} Free Carrier: The delivery of goods on truck, rail car or container at the specified point (depot) of departure, which is usually the seller’s premises, or a named railroad station or a named cargo terminal or into the custody of the carrier, at seller’s expense. The point (depot) at origin may or may not be a customs clearance center. Buyer is responsible for the main carriage/freight, cargo insurance and other costs and risks.

In the air shipment, technically speaking, goods placed in the custody of an air carrier is considered as delivery on board the plane. In practice, many importers and exporters still use the term FOB in the air shipment.

The term FCA is also used in the RO/RO (roll on/roll off) services. In the export quotation, indicate the point of departure (loading) after the acronym FCA, for example FCA Hong Kong and FCA Seattle. Some manufacturers may use the former terms FOT (Free On Truck) and FOR (Free On Rail) in selling to export traders.

FAS {+ the named port of origin} Free Alongside Ship Goods are placed in the dock shed or at the side of the ship, on the dock or lighter, within reach of its loading equipment so that they can be loaded aboard the ship, at seller’s

expense. Buyer is responsible for the loading fee, main carriage/freight, cargo insurance, and other costs and risks. In the export quotation, indicate the port of origin (loading) after the acronym FAS, for example FAS New York and FAS Bremen. The FAS term is popular in the break-bulk shipments and with the importing countries using their own vessels.

FOB {+ the named port of origin} Free On Board

CFR {+ the named port of destination} Cost and Freight

CIF {+ the named port of destination} Cost, Insurance and Freight

CPT {+ the named place of destination} Carriage Paid To The delivery of goods to the named place of destination (discharge) at seller’s expense. Buyer assumes the cargo insurance, import customs clearance, payment of customs duties and taxes, and other costs and risks.

In the export quotation, indicate the place of destination (discharge) after the acronym CPT, for example CPT Los Angeles and CPT Osaka.

CIP {+ the named place of destination} Carriage and Insurance Paid To The delivery of goods and the cargo insurance to the named place of destination (discharge) at seller’s expense. Buyer assumes the import customs clearance, payment of customs duties and taxes, and other costs and risks. In the export quotation, indicate the place of destination (discharge) after the acronym CIP, for example CIP Paris and CIP Athens.

DAF {+ the named point at frontier} Delivered At Frontier The delivery of goods to the specified point at the frontier at seller’s expense. Buyer is responsible for the import customs clearance, payment of customs duties and taxes, and other costs and risks.

In the export quotation, indicate the point at frontier (discharge) after the acronym DAF, for example DAF Buffalo and DAF Welland.

DES {+ the named port of destination} Delivered Ex Ship The delivery of goods on board the vessel at the named port of destination (discharge), at seller’s expense. Buyer assumes the unloading fee, import customs clearance, payment of customs duties and taxes, cargo insurance, and other costs and risks. In the export quotation, indicate the port of destination (discharge) after the acronym DES, for example DES Helsinki and DES Stockholm.

DEQ {+ the named port of destination} Delivered Ex Quay. The delivery of goods to the quay (the port) at destination at seller’s expense. Seller is responsible for the import customs clearance and payment of customs duties and taxes at the

buyer’s end. Buyer assumes the cargo insurance and other costs and risks. In the export quotation, indicate the port of destination (discharge) after the acronym DEQ, for example DEQ Libreville and DEQ Maputo.

25

DDU {+ the named point of destination} Delivered Duty Unpaid The delivery of goods and the cargo insurance to the final point at destination, which is often the project site or buyer’s premises, at seller’s expense. Buyer assumes the import

customs clearance and payment of customs duties and taxes. The seller may opt not to insure the goods at his/her own risks. In the export quotation, indicate the point of destination (discharge) after the acronym DDU, for example DDU La Paz and DDU Ndjamena.

DDP {+ the named point of destination} Delivered Duty Paid The seller is responsible for most of the expenses, which include the cargo insurance, import customs clearance, and payment of customs duties and taxes at the buyer’s end, and the delivery of goods to the final point at destination, which is often the project site or buyer’s premises. The seller may opt

not to insure the goods at his/her own risks.

In the export quotation, indicate the point of destination (Discharge) after the acronym DDP, for example DDP Bujumbura and DDP Mbabane.

In practice, trade terms are written with either all upper case letters (e.g. FOB, CFR, CIF, and FAS) or all lower case letters (e.g. fob, cfr, cif, and fas). They may be written with periods (e.g. F.O.B. and c.i.f.).

In international trade, it would be best for exporters to refrain, wherever possible, from dealing in trade terms that would hold the seller responsible for the import customs clearance and/or payment of import customs duties and taxes and/or other costs and risks at the buyer’s end, for example the trade terms DEQ (Delivered Ex Quay) and DDP (Delivered Duty Paid). Quite often, the charges and expenses at the buyer’s end may cost more to the seller than anticipated. To overcome losses, hire a reliable customs broker or freight forwarder in the importing country to handle the import routines. Similarly, it would be best for importers not to deal in EXW (Ex Works), which would hold the buyer responsible for the export customs clearance, payment of export customs charges and taxes, and other costs and risks at the seller’s end.

 

EXPORT DOCUMENTS

In a bid to ensure a well documented export transaction, the federal government of Nigeria has approved the following documents to ensure a successful export transaction. These documents include:

  1. CERTIFICATE OF INCOPORATION
  2. EXPORT LICENCE

III. PROFORMA INVOICE

  1. FINAL COMMERCIAL INVOICE
  2. PARKING LIST
  3. NIGERIAN EXPORT PROCEEDS (NXP) FORMS

VII. REQUEST FOR INSPECTION (RFI)

VIII. LETTER OF MANDATE

  1. BILL OF LADING
  2. SINGLE GOODS DECLARATION (SGD) FORM

 

Exporters incentives and address links is available on the next blog post, kindly check

3.0. HOW TO SOURCE PRODUCTS FOR EXPORT

Every exporter is strongly advised for their best financial interest to select product(s) which they intend to export based on accessibility and availability (such that it must be easily sourced). The said export products should be

procured from merchants who are based in rural areas where such products are either grown or produced. If the product is manufactured, hence the exporter should buy from the direct manufacturer. The reason for the above exercise is such that the exporter could procure the export goods at a very cheaper price for profit maximization and also for the exporter to remain competitive in the international market. With respect to the sensitiveness of export market requirements, prospective exporters are advised to source products from product merchant that understand the export market requirement of the commodity in question.

3.1. LIST OF EXPORTABLE PRODUCTS OF NIGERIAN

ORIGIN

Nigeria’s export policy is focused on non-oil export sector which comprises the following categories:

MANUFACTURED GOODS

Alkylate

Aluminum

Auto components

Alcoholic beverages

Baby clothes & other baby products

Bottles (empty)

Billets

Chemicals

Carbon black

Cocoa butter

Cocoa cake

Cocoa powder

Cocoa liquor

Confectioneries

Cosmetics & Soaps

Cylinders

Detergents

Doors (wooden)

Drilling equipment

Electrical wires

Furniture components

Filaments

Glass sheets

Glycerin

Hoof powder

Insecticides

Lubricants

Malt drinks

Palm kernel cake

Peugeot cars

Leather & Foot wears

Tires & tubes

Textiles & garments

Wire rod coils

Rebars/ round steel

Flat sheets

Semi blooms

Structures (Iron)

 

 

AGRICULTURAL COMMODITIES

Cassava

Cashew nut

Charcoal

Chilies (Dried)

Cocoa beans

Coffee

Cotton lint

Cotton seed

Cow horns

Fish

Fruits

Ginger

Groundnut

Gum Arabic

Kola nuts

Poultry

Rubber

Sesame seeds

Sheanuts

Shrimps

skins

Snails

Tobacco

Vegetable oil

Wheat pellets

Yam

 

 

SERVICES

Movies

Music and other services

SOLID MINERALS

Aqua marine

Bauxite

Columbite ore

Calcium carbonate

Coal

Gold

Galena

Gypsum

Ges

Iron ore

Kaolin

Lead ore

Marble stone

Pyrite

Sapphire

Tin

Tin metal ingot

Tourmaline

Tantalite

Wolframite

Zinc alloy ingot

Zinc ore

Zircon

 

HANDICRAFTS

Talking drums

Calabash carvings

Wood carvings

Raffia products

Metal carvings

Hand woven textiles

Beads

Pottery

Paintings (color & canvass)

PHARMACEUTICALS

Analgesics

Antibiotics

Disposable injections

Antipyretics

Anti malaria

Anti histamine

 

 

PROCESSED FOODS, VEGETABLE & SPICES

Ginger

Garlic

Ukazi

Cassava flour & derivatives

Garri

Locust beans

Yam flour

Plantain flour

Ground rice

Ground maize

Ground crayfish

Bitter leaf

Ground melon

Dehydrated vegetables

Horticultural products

Okra

Mangetout (French beans)

Mangoes

Pineapple

Sugar cane

Cut live flowers

 

3.2. EXPORT PRODUCT PROCESSING & QUALITY CONTROL

Since our major focus here is the export market, it is necessary to consider the processes involved in other to make it adequate for the export market. Some of the indexes which are of major focus when determining the quality of products to be exported include:

MOISTURE, ASH CONTENT, DIMENSION, COLOR, OIL

CONTENT, FREE FATTY ACID, ADMIXTURE E.T.C.

Sample of an export market requirement specifications for COAL

SAMPLE INDENTIFICATION

PERCENTAGE MASS

Moisture content………………………………………….0.1%

Ash Content………………………………………

4.0%

Volatility……………………………………………28%

Carbon Fix…………………………………………..80%.

Hydrogen………………………………………………..20%

Oxygen……………………………………………………12.5%

Nitrogen …………………………………………………….4.0%

Sulphur…………………………………………………………0.4

%

Other

Matter………………………………………………………0.01%

.

Subsequently, maintaining a good quality control is a prerequisite for a successful exporting business. This implies that products must be free of foreign matter such as stone, dirt, papers, nylon, etc. These will not only add unnecessary weight but might also contaminate the product especially such products that are useful for medical and food processes.

 

PRODUCT PACKAGING

It is important to note that there is no standard packaging method for any export product. The reason being that it is only the prospective importer that can specify the packaging method approved for a particular product in their country home. Therefore, exporters must seek the consent of their buyer before packaging. As a matter of fact, the packaging requirement will be clearly stated in the export contract which must be strictly adhered to.

In practice, most agro and allied commodities meant for export could be packaged in JUTE or POLY PROPYLENE (PP)/ MESH bags. Commodities like charcoal could be packaged in BULK such that the product is tipped directly

into the container without need for any packaging material.

 

International commodity pricing

 

It must be acknowledged that there is an approved international price for all exportable commodities. It is the responsibility of both the exporter and importer to agree on a price that will serve their interest. You can check the NEPC international price catalogue for more information. The international price of commodities is dependent on the following factors:

  1. Quantity and quality
  2. Local cost of procurement and logistics

iii. Terms of payment and delivery

  1. Prevailing local economic factors

 

METHODS AND TOOLS OF PAYMENT IN EXPORTING

The process of exporting is incomplete without receipt of payment. Export income is considered earned only when payment has been received. Below is the most recognized method of payment in exporting:

Letter of Credit (L/C)

The most popular and a safer method of international payment is by a confirmed irrevocable letter of credit at sight.

The documentary creditletter of credit, documentary letter of credit, or commercial letter of credit—is an arrangement whereby the applicant (the importer) requests and instructs the issuing bank (the importer’s bank) or the issuing bank acting on its own behalf, pays the beneficiary (the exporter) or accepts and pays the draft (bill of exchange) drawn by the beneficiary, or authorizes the advising bank or the nominated bank to pay the beneficiary or to accept and pay the draft drawn by the beneficiary, or authorizes the advising bank or the nominated bank to negotiate, Against stipulated document(s), provided that the terms and conditions of the documentary credit are fully complied with. For purpose of maintaining uniformity in the text, the words “letter ofcredit“, “credit” and “L/C” are used on this website to refer to the documentary credit.

TYPES OF LETTERS OF CREDIT

Irrevocable versus Revocable Letters of Credit A letter of credit (L/C) can be irrevocable or revocable. The L/C usually indicates whether it is an irrevocable or revocable letter of credit. In the absence of such indication, the L/C is deemed to be irrevocable. Irrevocable Letter of Credit An irrevocable letter of credit cannot be amended or cancelled without the consent of the issuing bank, the confirming bank, if any and the beneficiary. The payment is guaranteed by the bank if the credit terms and conditions are fully met by the beneficiary. The words “irrevocable documentary credit” or “irrevocable credit” may be indicated in the L/C. In some cases, an irrevocable L/C received by the beneficiary may become invalid without the amendment or cancellation of such L/C, for example, when the trade between importing and exporting countries is suspended such as in a trade sanction, or when the issuing bank has ceased operation. There have been cases of an irrevocable L/C being amended without the consent of the beneficiary in the. The beneficiaries affected were export manufacturers from a developing country.

The importers were able to convince and instruct the issuing bank to amend the latest date for shipment in the L/C,changing to a date earlier than the agreed upon date, at which time the beneficiary would not be able to ship the OEM products. The importers used sneaky tactics that aimed to cause the beneficiaries to default in the delivery.

The intention of the importers was to cancel the orders from the existing OEM suppliers and buy from other suppliers in another developing country where the prices had become lower. In the event of an amendment like the above mentioned case, the beneficiary must give notification of rejection of amendment to the bank that advised the amendment at once.

Irrevocable and Without Recourse Letter of Credit

The irrevocable letter of credit received from an advising bank may be indicated as “irrevocable and without recourse documentary credit”. The words “without recourse” mean that the advising bank will not be able to recover the money paid to the beneficiary in case the issuing bank does not pay the advising bank.

 

 

Revocable Letter of Credit

A revocable letter of credit can be amended or cancelled by the issuing bank at any time without the consent of the beneficiary, often at the request and on the instructions of the applicant. There is no security of payment in a revocable letter of credit (L/C). The words “this credit is subject to cancellation without notice“,”revocable documentary credit” or “revocable credit” usually is indicated in the L/C.

The revocable L/C was not uncommon in the 1970’s and

earlier when dealing with less developed countries. It is

rarely seen these days in international trade.

Confirmed Irrevocable versus Unconfirmed Irrevocable

Letters of Credit

Confirmed Irrevocable Letter of Credit

An irrevocable letter of credit (L/C) opened by an issuing bank whose authenticity has been confirmed by the advising bank and where the advising bank has added its confirmation to the credit is known as confirmed irrevocable letter of credit. The words “we confirm the credit and hereby undertake …” or “we add our confirmation to this credit and hereby undertake …

normally are included in the L/C.

An exporter whose method of payment is a confirmed irrevocable L/C is assured of payment even if the importer or the issuing bank defaults. The confirmed irrevocable L/C is particularly important from buyers in a country which is economically or politically unstable. In a confirmed letter of credit, the exporter or the importer pays an extra charge called the confirmation fee, which may vary from bank to bank within a country. The fee usually is added to the exporter’s account. The exporter may indicate in the sales contract that the confirmation fee and other charges outside the seller’s country are on the buyer’s account.

Unconfirmed Irrevocable Letter of Credit

An irrevocable letter of credit (L/C) opened by an issuing bank in which the advising bank does not add its confirmation to the credit is known as an unconfirmed irrevocable letter of credit. The promise to pay comes from the issuing bank only, unlike in a confirmed irrevocable L/C where both the issuing bank and the advising bank promise to pay the beneficiary.

Revolving Letter of Credit

When a letter of credit (L/C) is specifically designated “revolving letter of credit“, the amount involved when utilized is reinstated, that is, the amount becomes available again without issuing another L/C and usually under the same terms and conditions. The revolving L/C may be used in shipments of a wide range of goods to a buyer within a period of time (several months to one year usually).

 

 

DOCUMENTARY COLLECTION

Documentary collection is necessary when the draft is drawn on the importer. The exporter must give instructions to the collecting bank on what to do with the draft and shipping documents in documentary collection instructions, also

known as a collection letter or letter of instructions. Such letter provides the conditions under which the collecting bank can release documents to the importer and the actions to be undertaken. The format of the instruction forms and drafts may vary from bank to bank, but they basically have the same information. The forms and drafts are available at banks.

Uniform Rules for Collections

The Uniform Rules for Collections, ICC Publication No. 322, which describes the conditions governing collections  including those for the presentation, payment and acceptance terms), is issued by the International Chamber of Commerce (ICC) in Paris, France. The Uniform Rules for Collections and other ICC publications are available at your local Chambers of Commerce affiliated with the International Chamber of Commerce.

“TENOR ”

The tenor is the credit term of the draft. It can be at sight (in a sight draft) or after sight or after date (in a term draft).

.

“… CASE OF NEED … ”

The case of need is the party in the importer’s country named by the exporter who may assist in obtaining payment or acceptance of draft or who may be empowered by the exporter to act fully on his/her behalf—waiving of protest, allowing a discount, etc. Whether the case of need is ‘for guidance’ or ‘accept their instructions’, put an X in the appropriate box.

… DOCUMENTS AGAINST PAYMENT ”

In the documents against payment (D/P) —documents on payment (DOP or D/P) —the documents attached to the draft (bill) drawn by the exporter and needed to obtain goods are deliverable to the importer only after he/she has paid the draft. The document against payment (D/P) applies to a sight draft.

” … DOCUMENTS AGAINST ACCEPTANCE ”

In the documents against acceptance (D/A) —documents on acceptance (DOA or D/A)—the documents attached to the draft (bill) drawn by the exporter and needed to obtain goods are deliverable to the importer only after he/she has accepted the draft for payment later. The documents against acceptance (D/A) applies to a term draft.

“REMIT PROCEEDS … ” When the payment is received by the collecting bank, it remits the proceeds to the remitting bank. The remitting bank then credits the account of the exporter, less applicable charges.

” PROTEST ” and

” DO NOT PROTEST ”

The protest is the legal action to be undertaken by the collecting bank, at the instructions of the exporter, in case the importer does not pay a sight draft, or does not accept a term draft, or does not pay an accepted draft on maturity. In practice, the protest usually is required by the exporter and it is made within three (3) working days after the presentation or maturity date. In certain countries, failure to protest may cause the exporter to lose the legal rights against the importer.

In cases where the instruction is ‘do not protest’, such

instruction may encourage inaction or deferred payment by the importer. In some countries, particularly in the West, protest against the importer may spoil his/her credit standing. Hence, the importer is encouraged to act promptly if ‘protest’ is instructed by the exporter.

“COLLECT INTEREST … ”

The interest charge, if any, normally is agreed upon between the exporter and importer. It is either built into the export price or collected separately. Under certain pre-arranged credit terms, a discount may be allowed on the early payment of a term draft.

“COLLECT ALL YOUR BANK CHARGES … ”

In practice, the collecting bank may not collect some of their charges despite that instructions to collect all their charges is given.

4.1.3. OPEN ACCOUNT

In an open account trade arrangement, the goods are shipped to a buyer without guarantee of payment. Quite often, the buyer does not pay on the agreed time. Unless the buyer’s integrity is unquestionable, this trade arrangement is risky to the seller.

4.1.4. CONSIGNMENT

In a consignment trade arrangement, the seller ships the goods to the buyer when there is no purchase made. The buyer is obliged to pay the seller for the goods when sold.

The seller retains title to the goods until the buyer has sold them.

4.1.5. CASH IN ADVANCE (CID)

The cash in advance, which is the safest term of payment, most often is effected using the cheque or bank draft. In some cases, the CID term is paid using the telegraphic transfer (T/T).

4.2. TOOLS/ INSTRUMENTS OF EXPORT PAYMENTS

Below are some of the means through which an exporter can repatriate proceeds of export:

4.2.1. CHEQUE AND BANK DRAFT

In exporting to the offshore countries, payment by cheque and bank draft occur more often in a small order, ranging from a few hundred to a couple of thousand  U.S. dollars. Cheques and bank drafts are often used in open account and consignment trade arrangements. Both large and small companies may default in their payments, regardless of the amount involved. In times of economic uncertainty, both large and small companies may go out of business. It is important to receive the cheque or bank draft before releasing the shipment. Unless the integrity of the importer is known, it is very important to wait until the cheque or bank draft has cleared before the shipment. International clearing of cheques and bank drafts takes 3 to 4 weeks usually (except in a sight draft with a paying bank in the seller’s country).

Not all cheques and bank drafts are genuine, and not all genuine cheques carry a cash value.

.

4.2.2. TELEGRAPHIC TRANSFER (T/T)

The telegraphic transfercable transfer or wire transfer

–is the equivalent of a cash payment that can be credited directly to the seller’s account (the name and address of the seller’s bank and the seller’s bank account number are required by the buyer’s bank). It is fast and safe. Unlike a payment by cheque or bank draft, in which the mailing time alone may take several days to few weeks, plus the clearing time of 3 to 4 weeks for a total of about 4 to 6 weeks before the seller may receive the cash, by means of T/T the seller may receive the cash in a few hours or days. It is important to wait until the T/T has been received before making the shipment, especially when the integrity of the buyer is unknown.

For an exporter to successfully repatriate export proceeds, he must have an active cooperate domiciliary account with any reputable commercial bank in Nigeria. Such an account could be a Dollar, Euro or Pounds sterling. As a professional, I advise that every exporter should operate three currency accounts for flexibility. Upon opening of a domiciliary account, the exporter should request for his commercial bank’s offshore account details which must be presented to the foreign buyer in this format;

NAME OF CORRESPONDENT BANK: Eg CITIBANK

NEWYORK

ADDRESS OF CORRESPONDENT BANK: 111 WALL

STREET, NEW YORK, NY 10043, USA

ACCOUNT NUMBER… (USD/EURO/POUNDS)

SWIFT CODE…

ROUTING…

BENEFICIARY BANK…Eg SPRING BANK PLC

SWIFT CODE…

FOR FURTHER CREDIT TO………..EXPORTERS

ACCOUNT NAME

ACCOUNT NUMBER… EXPORTERS DOMICILIARY

ACCOUNT NUMBER

Sample Document:

Documentary Collection Instructions and Draft

(Collection Letter and Draft)

 

 

TERMS OF EXPORT PAYMENT

The terms of payment valid are:

Bank transfer by means of payment order

Bank transfer by T/T

Cash against document (CAD)

Cash against delivery

Prepayment of a certain % of the contract value

Any other type of payment agreed upon

 

 

EXPORT CONTRACT

Having understood the primary rudiments on how to embark on an export transaction, the next step would be to seek a genuine foreign buyer/ consignee/ importer of the product that you have selected to export. The prospective importer might place an order for your products upon receiving you proposal/ letter of offer to supply the product in question.

The demand/ order for your goods by a foreign importer is called a firm EXPORT ORDER and you as an exporter must ensure that it is genuine.

This order must be constituted by

ELEMENT OF EXPORT SALES CONTRACT

Sales contract for export must contain the following elements.

Contract number

Full name and address of buyer and seller

Name of product/ goods

Product specifications

Quantity required

Packaging method and standard required by buyer

The agreed export price

Port of shipment (e.g. Tin can Island port)

Port of delivery (e.g. Antwerp port)

Terms of sale (FOB, CNF, CIF, etc.)

Method of payment (L/C, documentary collection, open account, etc.)

Shipment/ delivery term (e.g. Cargo to be shipped two weeks upon confirmation of payment instrument)

Contract value

Name and signature of representatives of both buyer and seller However, to get an export order or contract is the responsibility of the exporter.

ONLINE METHOD

The online method involves the use of online trade portals in locating trade leads posted on the internet indicating interest to purchase Nigerian products. It also involves the use of emails to respond to such offers to buy Nigerian products.

ROLES OF THE INTERNET IN INTERNATIONAL BUSINESS

At this stage, I feel delighted to mention that the roles of the internet especially in international business cannot be over emphasized

It is the safest, fastest and cheapest means of communication.

You can freely source for the contact of interested buyers of any product.

Products can also be advertised to the whole world at a

peanut if not for free.

Considering the above therefore, the exporter must have a

valid and functional email address and must know how to

access it on the net, sending and receiving emails etc.

 

 

USEFUL ONLINE INTERNATIONAL TRADE DIRECTORIES

The most important step in establishing contact with foreign buyers in need of products of Nigerian origin is by signing up with any of the under listed trade directories

www.alibaba.com

www.cokodeal.com

www.howtrade.com

www.tradekey.com

www.busytrade.com

www.importers.com

 

You can also search for more directories with the Googlesearch engine at http://www.google.com.

 

SAMPLE: LETTER OF OFFER

10th November, 2018

The director,

Commercial department

Dear Sir,

Letter of offer to supply hardwood charcoal

Please permit me to introduce our company. We are B.C. & Bros. Int’l Nig. Ltd an international trade outfit registered under the companies and allied matters act of the federal republic of Nigeria.

We are also licensed to embark on export transaction by the Nigerian Export Promotion Council.

We offer in principle hardwood charcoal with the following terms:

Product name: Hardwood charcoal

Country of origin: Nigeria

Specifications: moisture content 8% max, ash content 7%max, non volatile

matter 4%max, fix carbon 80% min, dimension 30-100mm (no dust below 20mm)

triple sieved with mesh, no unburnt wood.

Packaging method: Bulk

Port of loading: Tin can Island Port, Lagos

Price: 250euro/ton, FOB, Lagos

We look forward to a mutually profitable business relationship.

Best regards,

Your name

CEO

Tradolic Nigeria Ltd

0903228***

Upon acknowledgement and acceptance of offer by the prospective buyer and a method of payment agreed by both parties, an export sales contract is signed between buyer and seller.

 

 

SAMPLE: EXPORT SALES CONTRACT

Contracted to be drafted with COMPANY LETTER HEADED

PAPER with contact details

7th September, 2008

EXPORT SALES CONTRACT FOR THE SUPPLY OF SESAME SEED

This contract is for the sale of sesame seed and should be utilized solely for the purpose of this transaction

Contract number: KBS/0908/001

Buyer’s details

Company name: HASSAT GROUP

Address: 10 Hatam road by Tequila square

City: Abu Dhabi

Country: UAE

Phone/ fax: +98234564105, +98235678197

Contact person: Mr. Abdul Mohammed

Seller’s details

Company name: Tradolic Limited

Address: Suite 45, Isaac John, Ikeja Lagos.

City: Lagos

Country: Nigeria

Phone/ fax: +2348534785

Contact person: Mr. Akeem Okeke

Name of product: Sesame seed

Country of origin & supply: Nigeria

Specifications Color: white

Oil content: 48-50%

Moisture content: 12%max

FFA: 2%max

Admixture: 2%max

Packaging: 50kg pp bags

Quantity: 30MTS (2 X 20 feet containers)

Price: 2,000US$/ Ton

Contract value: US$60,000 (Sixty thousand naira only)

Incoterm: FOB, Lagos

Method of payment: 100% confirmed irrevocable letter of

credit

Terms of payment: 100% payment to be effected upon

sighting of shipping documents

Method of delivery: By sea

Terms of delivery: Product to be stuffed into 20’ containers

two weeks upon confirmation of payment instrument.

Buyer’s signature/date……….. Seller’s

signature/date………………

 

 

Summary of Export-Import Procedure

EXPORT-IMPORT PROCEDURE

1 Seller and Buyer conclude a sales contract, with method of payment usually by letter of credit (documentary credit).

2 Buyer applies to his issuing bank, usually in Buyer’s country, for letter of credit in favor of Seller (beneficiary).

3 Issuing bank requests another bank, usually a correspondent bank in Seller’s country, to advice, and usually to confirm, the credit.

4 Advising bank, usually in Seller’s country, forwards letter of credit to Seller informing about the terms and conditions of credit.

5 If credit terms and conditions conform to sales contract, Seller prepares goods and documentation, and arranges delivery of goods to carrier.

6 Seller presents documents evidencing the shipment and draft (bill of exchange) to paying, accepting or negotiating bank named in the credit (the advising bank usually), or any bank willing to negotiate under the terms of credit.

7 Bank examines the documents and draft for compliance with credit terms. If complied with, bank will pay, accept or negotiate.

8 Bank, if other than the issuing bank, sends the documents and draft to the issuing bank.

9 Bank examines the documents and draft for compliance with credit terms. If complied with, Seller’s draft is honored.

10 Documents release to Buyer after payment or on other terms agreed between the bank and Buyer.

11 Buyer surrenders bill of lading to carrier (in case of ocean freight) in exchange for the goods or the delivery order.

 

FREIGHT FORWARDING

Freight forwarder

This is a specialized firm and it performs the following functions on behalf of the exporter  advising on the best route to undertake and the relative shipping cost Booking the necessary space and containers with the shipping line

Arranging with the exporter for packaging and subsequent marketing of the goods Consolidating shipments from different exporters (Groupage)

Handling customs insurance abroad Arranging marine insurance for the shipment Preparing the export documents Arranging for transport that will convey container to and fro the stuffing warehouse back to the port of shipment.

In other words, the freight forwarder who in most cases is a customs broker is the one that actually tells an exporter the cost of shipping and insurance.

 

 

SHIPPING DOCUMENTS

These include

Final commercial invoice:

This is the exporting firms invoice, addressed to the importer describing The goods shipped, Unit price of each commodity that was shipped and The total amount that must be paid

The exporter may also be asked to when providing an export quotation for the foreign buyer to supply a PROFORMA INVOICE to the buyer. This document shows the foreign buyer what the commercial invoice would look like if an order is placed. The exchange authorities in the foreign country some times require it before an import license is issued.

Certificate of origin:

This is a document which indicates the country in which the goods were produced. It is required whenever preferential duties are claimed.

Bill of lading: The shipping company that is transporting the goods to their foreign destination, listing items by items and the goods being shipped. It serves three basic purposes: To acknowledge the receipt by the carrier of the exporter’s

goods To indicate the carrier’s contractual obligation to transport the goods to their destination in exchange for payment To record transfer of title (or ownership) from the seller to the buyer when payment of the goods takes place

Certificate of quality and quantity: This is a document issued by a reputable inspection agency such as SGS, Alexis Stewart, Alfred Knight, Cotectna, Bureau Veritas etc. certifying the quantity and quality of shipment made by the exporter. The essence is to ensure that a third party confirms what the exporter has declared in his shipping documents.

 

HOW TO OPEN AN EXPORT TRANSACTION

According to federal government’s regulation stipulating that all export transaction must be well documented to ensure a comprehensive monitoring of all export activities in the non oil sector. Subsequently, such documentation will assist government in keeping a detailed statistics on the performance and impact of non oil export to our national

GDP. Official export documentation is necessary so as to ensure adequate sanity in the Nigerian export business environment. A well documented export transaction will also act as an evidence for the exporter when it files an application for the collection of government grant for all export.

To this end, all exporters are charged to comply strictly with regulations laid down by the relevant authorities as it concerns export.

To open an export transaction, an exporter approaches the foreign trade department (FT) of his receiving or advising bank where he has an active cooperate domiciliary accountand then completes Nigerian Export Proceeds (NXP) Form popularly called NXP from. This form is synonymous with “FORM M” for import. This form must be duly filled in sextuplicate and returned to the bank with the following accompanying documents

PROFORMA INVOICE

CERTIFICATE OF INCOPORATION

EXPORT LICENSE

REQUEST FOR INSPECTION (RFI) FORM

The receiving bank officer will then sign, acknowledging receipt of the NXP form, proforma invoice and other relevant documents from the exporter. The exporter after submitting the said documents is mandated to pay for NIGERIAN

EXPORT SUPERVISION SCHEME (NESS). In return, the bank officer issues the exporter photocopies of the Duly completed NXP form Proforma invoice

Ness charge receipt (original and photocopy)

These are the documents which the exporter will issue to his freight forwarder or customs broker for subsequent booking of container/ cargo space for shipping.

 

 

STEP BY STEP PROCEDURE ON HOW TO EXPORT ANY NIGERIAN PRODUCT

Seller (prospective exporter) incorporates company and subsequently registers business with the Nigerian Export Promotion Council (NEPC).

Seller approaches bank and opens a cooperate domiciliary account (USD/EURO/POUNDS) with which the company can repatriate export payments (payments).

Seller gathers information as it concerns the source for the procurement of the commodity intended for export.

Seller should try as much as possible to gather as per the export market requirement of the commodity for export. Seller must ensure that product is available in large quantity such that it would meet the minimum order that could be requested by buyer (foreign importer). At this stage the services of an export consultant/ facilitator/ manager would be both invaluable and indispensable because of the pitfalls it would save the new exporter from falling into.

Seller embarks on a massive search for the buyer of the commodity in question. The search could be done online or offline.

Buyer and seller conclude an export contract with a secured and confirmed method of payment.

Seller may investigate buyer’s genuineness

Seller approaches bank and opens NXP for the transaction. Seller approaches a reliable freight forwarder who advices on the best shipping line, routes and any other documentation that may be relevant for that transaction. Seller consolidates with credible suppliers of the commodity intended for export to ensure timely delivery of commodity for export.

Upon arrival of goods, freight forwarder arranges for transport and containerization of goods.

Loaded container is dropped at the shipping terminal for Subsequent shipment.

Upon sailing of carrier vessel, shipping line issues seller with debit note. Seller obtains bill of lading from shipping line after payment of charges as indicated in the debit note.

Seller deposits shipping documents with the receiving/ collecting bank that subsequently sends them to buyer’s bank for remitting of export proceeds.

Upon receipt of payment, seller prepares for another export transaction.

 

Thank you for completion.

 

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http://www.cokodeal.com/seller-registration.htm

Article credit:  Cokodeal contributor

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